Tesco increases its presence in Poland

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The Independent Online

Tesco has pushed further into the Polish market, snapping up 220 convenience stores from its French rival Casino for £72m.

The disposal is one of a series of deals that marks Casino's exit from Poland as part of the mission of the debt-laden French chain to raise €2bn (£1.4bn) by the end of 2007.

Tesco will convert the Leader Price chain to its own brand. The stores are about 7,000 sq ft, too large to convert into its smallest Express format. The deal is subject to regulatory approval.

The UK's biggest supermarket group gained a toehold in Poland in 1995 and has since become the country's biggest hypermarket group, owning 107 super-sized stores. The Polish food market is highly fragmented and even after yesterday's acquisition Tesco's market share is just 5.5 per cent, up about 1 percentage point.

Tesco was one of three companies helping to break up Casino's Polish assets. The French group sold its 19-strong hypermarket chain Geant to Germany's Metro and land with planning permission for a further seven sites to GE, the US industrial group. Metro is Poland's biggest foreign retailer by sales area.

Kevin Grace, who runs Tesco Poland, promised to bring "convenience, low prices, service and quality" to Polish consumers. Apart from the major multinational brands, the group sticks to stocking mainly local brands in its foreign stores. It rarely stocks British brands and sells its own-label ranges in only a handful of stores in cities with a large expatriate community.

Tesco employs more than 20,000 Poles and has 20,000 Polish suppliers. It also has stores in the Czech Republic, Slovakia and Hungary.